British Airways (Sale) (Hansard, 21 October 1986)

§ Mr. Moore

As I announced on 11 September the Government have decided to sell their shareholding in British Airways in the early weeks of 1987. The offer will be payable in two instalments. I am delighted that it will now prove possible to free the company from the constraints of Government control and to enable the employees, customers and members of the public to take a real stake in its future.

The flotation will provide a further major opportunity to strengthen the basis of individual share ownership in this country. I therefore intend to build on the success of previous privatisations by publicising details of the offer for sale and of how to apply for shares widely in the press and on television. A share opportunity office has been established to register inquiries and despatch information about the company and the offer for sale. British Airways' senior management will be touring the country extensively to promote the issue, and to assist in this process I have selected regional co-ordinators for the whole of the United Kingdom. To foster the commitment of the new generation of share-holders, a small portion of the equity will be retained to enable a loyalty bonus to be paid to those initial purchasers who retain their holdings 776W continuously for three years. One free share will be offered for ten, up to a maximum value of £5,000 of shares initially purchased.

I recognise and want to pay tribute to the management and staff of British Airways whose efforts have made it possible to look forward to a successful flotation. It is right that they should have a special opportunity to take a stake in the company's future. I have accordingly decided that they should have the opportunity to acquire free, matching and discounted shares on broadly the same terms as British Gas employees.

Finally, British Airways is an international business and it will benefit both its commercial interests, and the Government's as vendor in maximising demand if a limited portion of the equity is allocated to overseas markets. The Government already have an adviser on the United States market. I have decided in addition to appoint advisers on the European, Japanese and Canadian markets. Final decisions on which, if any, of these markets to use and the size of any overseas allocation will not be taken until close to the start of the offer period. I would not, however, envisage that the allocation to overseas markets will exceed 20 per cent.

I am placing details of my announcement on II September, the regional co-ordinators selected, the terms of the preferential share offer to employees, and the advisers to overseas markets in the Library.